Trading with Velocity Zones | Crude Oil, Emini, Nasdaq, Gold, Euro

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With most professional traders sitting on the sidelines this afternoon for the FOMC Announcement, we know that tomorrow (what I call “Reaction Thursday”) has the potential to be a very busy trading day…

And with a lot of strong moves in the wake of this afternoon’s rate cut, I’m looking closely at the charts, finding the “velocity zones” where I can wait for the opportunity to buy a pullback – are you ready?

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Crude Oil is bearish and keeps grinding lower as the week goes on, and the lack of any real pullback off these lows is a big clue for tomorrow morning…

Knowing this, I can assume there are a lot of sellers waiting up at the highs of the bear channel, and I’m waiting for the next pop higher so I can sell it back down again.

E-Mini S&P is bullish with a strong spike running higher, which tells me to look for one of three different chart patterns – channels, ranges, and flags…

But the most important clue on the chart is what we DIDN’T see this afternoon, and that important clue helps me define the “velocity zones” where I’m looking for my buy set-ups on Thursday morning…

Nasdaq is bullish with a strong run higher, and the strength of this move tells me that buyers will be eagerly waiting to buy the next pullback to support levels…

So I’ve marked the higher-highs with a trend-line, and used that to find a new Hidden Channel to buy off the lows tomorrow morning…

Gold is bearish, but look at the bigger picture and it’s easy to see we’re trading below the weekly trading-range, which isn’t a great place to be selling…

I’d rather be a buyer off these lows, but I need to respect the bearish momentum before I commit to the entry, and I’m looking for a “nested” seller-failure to buy it back up into the range tomorrow morning.

Euro is bearish and finishing the day inside a range, which tells me to buy the low, sell the high, and avoid the middle tomorrow morning…

And knowing that the short-term momentum is bearish, my goal is to sell off the high using a buyer-failure set-up on Thursday.
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Economic News:
Please remember that economic news, both scheduled and un-scheduled will increase volatility and decrease liquidity in the market in the short-term, which causes price-action to react inconsistently with the levels of support and resistance mentioned in this video. Trading during economic news reports is dangerous and highly discouraged, no matter what your level of experience.
PLEASE DO NOT TRADE DURING TIMES OF MAJOR ECONOMIC NEWS
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Joseph James, SchoolOfTrade.com and United Business Servicing, Inc. are not registered investment or trading advisers. The services and content provided by SchoolOfTrade.com and United Business Servicing, Inc. are for educational purposes only, and should not be considered investment advice in any way. U.S. Government Required Disclaimer – Commodity Futures Trading Commission. Futures and Options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. cftc 4.41 These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or-over-compensated for the impact, if any, of certain market factors, such as liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Comments

Crazy Aliens says:

Nasdad hás no pull back as planned.

Luciano Pucci says:

I really hope that other people watching this amazing video can appreciate all of the great knowledge and experience that JJ is sharing. It really is apparent to me every time I watch his explanation and reasoning come to life the very next day. Blows my mind how well he knows this stuff.
Thank You JJ for sharing. Luciano

Kofi Aboagye says:

A. Gradually learning your method thank James

Qin Liu says:

The best! What drawing tool do you use for teaching?

Joseph James says:

Velocity Zones are areas on the chart where price moves so quickly that most traders weren't able to participate, and those zones become reliable S/R levels for Thursday's trading session – do you know where they are?

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